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transitioning from FTT appointed manager back to RTM

11-02-2019, 05:51 AM

Hello,

Would be extremely grateful for help with this from someone with experience and knowledge of RTM companies:

I am a leaseholder in a large (30) block of flats. Up until 4 years ago the building was under RTM management (for about 10 years), but for the last 4 we have have been under a first tier tribunal appointed manager. To cut a long story short: the building is heritage, has needed a lot of expensive repairs, Section 20s, all extremely costly for leaseholders, high service charge, values of flats plummeted. Lots of hostilities between RTM and leaseholders about how things were being run, mistrust, breakdown of communication.
The past RTM operated like a closed clique with not much change of members; little power-sharing and was not open to having new people come on board as directors. Also the chair of the board sought to have a lot of power, and does not even reside in this country. (?!). From what I know of RTMs and the ethos behind them - these two things - being exclusive and having a non-residential nor local chair seems to go against the very principle behind the RTM?

This all created a lot of hostility so the board applied to the FTT and sought money from certain (not all - only the ones who felt supported them) leaseholders to do so.

Since the FTT manager has taken over there has been a hiatus in the hostilities and we have moved forward with a lot of the repairs. However, now the manager's time is up and they want to hand back to RTM next year. We are fearful that the current manager (the FTT appointed one) is in the pockets of the previous board (who he seems to have been consorting with) and is going to do the easy thing and enable them to slot back into power - without addressing the historical problems. My view and that of many others is that there needs to be a change of directorship if the building is to move forward out of the ghastly situation of before.We are being called to a meeting about this soon. Can anyone comment on this situation and tell me anything about:

- what the status of the previous RTM would now be (following the FTT period); is it dormant or dissolved?
- how would the RTM be reformed and how do we appoint new directors?
- is there anything we can do to ensure that the new board is not composed by a majority of the old members?
- what should we ask/demand the outgoing manager do to ensure the RTM starts afresh? (he has actually said to me on the phone that he thinks there should be new people on the board) and does he have power over this process?
- if we are unhappy with the ensuing situation can we go back to the FTT and complain?

The purpose of an RTM Company is for the leaseholders to run the management of the property and make decisions. In your case, it looks like one or more leaseholders/members are abusing their power and they are not acting in the best interests of the other leaseholders/members. The best solution is for the majority of leaseholders/members to decide at the meeting how to proceed in future, appoint the directors they wish to represent them and decide which managing agent they want to be appointed at the property.

There is always the right for a leaseholder to apply to the FTT but you should consider it as a last resort and the RTM Company is there for you to make decisions yourselves.

Comment

Apologies I did not address a couple of your questions. You can check the status of the RTM at Companies House, it is probably dormant. It would not be allowed to operate at all if it had been dissolved. Someone (the agent?) is arranging the meeting to decide how the RTM proceeds. If the agent is receptive to new directors being on the board, that appears to be a good sign, there is the opportunity for leaseholders/members to put themselves forward and appoint those who are likely to act in their best interests.

Comment

Changing directors is covered in other recent threads, but basically you simply ensure that enough members of the company are prepared to vote against the current directors, and for your choice of new directors, on a simple majority vote, then request the calling of a general meeting for the purposes of removing the current directors (name them all) and appointing your new directors. It may even be being consulted by the manager. The main difference is that the manager has the ultimate decision, whereas, normally the RTM would override a managing agent.

I would caution you though, that your new directors need to include people who don't need to be be told how to find out if the company still exists and who the directors are They also need to include people who are familiar with the details of the lease and RICS Service Charge Residential Management Code.

Comment

Thank you both for your timely replies, this is really helpful Yes the company is listed as dormant so I suppose that means everything is still as it was. Yes the agent is arranging the meeting. It's good to know that the manager has ultimate say over the formation of the board, and cannot be overridden by the RTM.

Comment

I would caution you though, that your new directors need to include people who don't need to be be told how to find out if the company still exists and who the directors are They also need to include people who are familiar with the details of the lease and RICS Service Charge Residential Management Code.

That comment is completely out of order. There is no point scaring people from acting as directors and allowing an unsatisfactory position to continue. The leaseholders should take back control of the RTM.

Leaseholders are usually laypersons who cannot be expected to understand all possible relevant sections of Company Law, Landlord & Tenant legislation and the RICS management code of practice. There are useful booklets available free of charge and leaseholders are entitled to receive support from a managing agent.

Comment

I hope that you volunteer to become a director and you can learn as you progress like most of us have done over the years and continue to do. It is only when you think that you know everything that you need to stop and take another look.

Please feel free to come back here if you need any assistance or an alternative opinion.

Comment

Thanks, I am thinking about it, but from everything I've read it seems to be a big commitment and lot of responsibility and work and I'm a working mother of a young child so I"m not in the ideal position. I would perhaps rather endorse people that I know would be good on the board and who also do have the time. Have to say though situation here has been so bad that I am a bit put off as to how difficult the politics of RTMs can become and would not want to be on the other end of angry leaseholders and have all that trouble directed my way. (honestly I can see that happening here - it's a funny place this building, with difficult personalities and quirks and some unhealthy alliances etc I wouldn't describe it as a very freindly place

Comment

If you have a good managing agent, who is transparent about the charges and deals properly with complaints and comments, he should shelter the directors from problems with the leaseholders. As a director your standard response to a leaseholder would be to discuss any problem with the agent.

There should be little need for the directors to have much involvement. For the size of your property a couple of meetings a year should suffice and those meetings could be dealt with by an exchange of emails if all the directors agree.

See how you get on at the meeting anyway. The usual problem is that there is a lack of volunteers which made someone else’s comments on here inappropriate.

Comment

I am aware of Companies where directors communicate entirely by email and telephone. That is usually due to the distance between them or it is just convenient to hold meetings in that way but it demonstrates that it can be done and becoming a director does not need to become onerous. Directors at other Companies make a meeting a social event, by arranging coffee and biscuits or wine and cheese.

Comment

One further thought, you may wish to contact other members ahead of the meeting to see if they would be willing to become directors. That way you can decide in advance whether to support them or put your own name forward, Good luck anyway.

Comment

The appointment of a good managing agent is very important and will ease the workload of the directors as suggested above. Ideally the directors would carry out due diligence and consider 2 or 3 different managing agents and seek references from directors at other blocks before appointing an agent.

Comment

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